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Export Finance Australia gives a leg up to Boab Metals’ Sorby Hills project

Image Source: BML company website

Summary

  • Export Finance Australia has issued a Letter of Support for the potential provision of debt finance for Sorby Hills Project development. 
  • Export Finance Australia is the export credit rating agency of the Australian Government that provides financial solutions to the projects boosting the extraction and processing of minerals in Australia for export. 
  • Boab has already progressed to the due diligence stage of the NAIF’s debt financing assessment and approval process.

Lead and silver explorer and developer Boab Metals Limited (ASX: BML) has received a Letter of Support from Export Finance Australia (EFA) for the potential provision of debt finance. Export Finance Australia, subject to due diligence and credit assessment, will consider assisting Boab Metals financially with the Sorby Hills Lead-Silver Project. 

Export Finance Australia is the export credit agency of the Australian Government providing financial solutions such as loans, guarantees and bonds to assist Australian exporters. The eligibility for receiving support depends upon the project’s ability to boost the extraction and processing of minerals in Australia for export. 

Following the update, BML share price rose by 10.3%, trading at AUD 0.430 on 10 March 2021 (at 1:17 PM AEDT). 

ALSO READ: Boab Metals revving up Sorby Hills project to boost shareholder’s value

Letter of Support- A significant Step for Sorby Hills Development

The Letter of Support signifies the first landmark achieved in Boab’s engagement with Export Finance Australia catering to the development and financing of the Sorby Hills Project. As part of its subsequent steps, Export Finance Australia will undertake further due diligence was  and credit assessment as the Sorby Hills DFS progresses toward completion.

Notably, the Letter of Support itself does not constitute a commitment to offer debt finance. Furthermore, there is no certainty that both parties will reach an agreement. Boab intends to aid Export Finance Australia through its necessary due diligence assessment.

Source: Copyright © 2021 Kalkine Media Pty Ltd, Data Source: BML ASX update, dated 8 March 2021

Boab Managing Director and CEO, Mr Simon Noon, commented that Sorby Hills was on course to becoming a significant mineral export project which would provide material economic benefits to Western Australia’s Kimberley Region, where the project is situated. 

Hailing the Letter of Support received from Export Finance Australia, Mr Noon said that it represented an immense opportunity for the Company to draw competitively priced as well as structured project debt finance. 

Boab has already progressed to the due diligence stage of NAIF’s (Northern Australia Infrastructure Facility) debt financing assessment and approval process. The latest development has also created a potential for Export Finance Australia and NAIF to work collaboratively with Boab’s financial advisers (BurnVoir Corporate Finance) on the proposed project financing. 

Mr Noon stated that the Company looks forward to working with EFA as it progresses towards a Decision to Mine in the first quarter of 2022.

ALSO READ: Boab Metals (ASX:BML) eyes resource expansion at Sorby Hills post stellar assay results

Boab Metals intends to run an offtaker selection process for assigning its interest (75%) in the production from Sorby Hills Project. As an early initiative, Boab commenced a preliminary offtake sounding with several well-credentialled base metals customers. The initial round of offtaker engagement has highlighted strong demand for the Sorby Hills Lead-Silver Concentrate, signalling its high desirability among potential offtakers. 

READ MORE: Boab Metals Limited (ASX:BML) at a Vantage Point with Strong Global Demand for Sorby Hills Lead-Silver Concentrate

The Company is confident that it will have binding offtake agreed on very competitive terms ahead of the DFS completion. The offtaker selection process is managed by BurnVoir Corporate Finance.

Following the DFS metallurgical program’s conclusion in the second quarter this year, the company will kick off formal discussions with offtakers and launch a competitive tender process for its portion of the Sorby Hills concentrate. Boab plans to execute the binding offtake terms before concluding the Sorby Hills DFS.

BML share price closed at AUD 0.410 on 10 March 2021, up 5.128% from the previous close.

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